This post is from a post on bigger pockets a real estate investment site. I worte on anwering a question about flood insruance.
Flood Nerd responce to question on buying flood insurance
@Aaron K. and @Claire Rosenberg all properties are in a flood zone the only differentiator with the flood zones is the “high-risk” flood zones is your lender will require flood insurance in order to get the funds.
This is a law.
These flood zones are identified with a Flood zone A, Flood zone AE or V, VE.
Lenders do not need to require flood insurance in low-to-moderate risk flood zones usually identified as an X flood zone.
It doesn’t mean that the property will not flood it just simply means that you will not be “required by your lender” to purchase a flood insurance policy.
Every year 20% and in some estimates 35% of flooding events are in the “considered low risk” flood zones.
The purpose of all insurance (including flood) is to off set your risk this is why you buy a hazard (or homeowners policy) or umbrella policy or auto policy and of course life insurance.
But flood insurance is the one that most people decided that they do not need, and many think that their homeowner policy will cover flooding. The lion’s share of homeowner policies exclude flooding as something they will cover this is due to the fact that they know your property (any property has a higher risk of flooding then ever having to make a claim on what they will cover) primarily fire which has a .01% of ever happening.
There are many individual reasons why flood insurance is skipped by property owners. and if you want to discuss your risk you should call your agent or PM ME.
Most flood zones are political.
For example we are policies for properties that are ocean facing and on islands all along the east coast that are considered low risk. (hello hurricane season)
The maps are changed because being “forced to purchase” flood insurance is vastly unpopular, and communities redraw the maps to make them beneficial to certain neighborhoods/communities.
The benefit of being in a X or low risk flood zone is that you can get a policy for rather cheaply like around $500 and cover the risk you likely have. PM me if you want more information about this. I think if you have a notion to ask the question of the BP community you intuitively know that there is a risk you could have of your unit getting water in it. Which would be very sad if you didn’t offset the risk with an insurance policy. Maybe our community will donate money to help you rebuild (again that is a risk) . Too bad we can’t buy an insurance policy on kindness and taking care of each other.
Yoru flood nerd Robert
Here are some other rescouces you might be interested in for Condo Flood Insurance, master flood polcies and other issues dealing with condominums and flood insurance.